The Senate has passed the Petroleum Industry Governance Bill (PIGB) which had been held up at committee level for nearly a decade.
The bill, passed by the Senate yesterday, splits the NNPC into two, namely National Petroleum Company (NPC) and the Nigeria Petroleum Assets Management Company (NPAMC).
The NPC would be in charge of Petroleum Products, while the NPMAC shall be responsible for the management of assets currently held by the NNPC as a fully commercial entity.
The draft law proposes the establishment of the Nigeria Petroleum Regulatory Commission (NPRC) to serve as the regulator and watchdog for licensing, monitoring, supervision of petroleum operations enforcing laws, regulations and standards across the value chain.
The companies, according to the draft law, would absorb the present Department of Petroleum Resources, Petroleum Products, Pricing and Regulatory Agency (PPPRA) and the Petroleum Equalization Fund (PEF).
The new law sets out to create a conducive business environment for petroleum operations, enhance exploitation and exploration of petroleum resources in Nigeria, increase domestic gas supplies, especially for power generation and industrial development.
It seeks to encourage investment in the petroleum sector, increase government revenue, establish profit-driven oil entities and deregulate the downstream petroleum sector
Other key features are to create efficient regulatory agencies, promote the development of local content in the oil industry and to protect health, safety and the environment in petroleum operations.
Among Senators who spoke in support of the bill are Deputy Senate President, Senator Ike Ekweremadu and Senator Jibrin Barau (APC, Kano) who insisted that the bill benefit the country.
Senate President, Bukola Saraki said PIGB would strengthen the oil and gas industry.
He expressed joy for the passage of the bill saying it would reduce corruption and inefficiency in the petroleum industry.
“The importance and impact of this Bill can never be overstated. Nigerians are ever closer to reaping the full benefits of our nation’s natural resource wealth.
“This means there will be greater revenue for government to invest in economic diversification, job creation, hospitals, schools and roads,” he said.
After the session, chairman of the Senate Committee on Petroleum (Upstream), Senator Tayo Alosoadura, his downstream counterpart, Senator Kabiru Marafa and that of Gas, Senator Bassey Akpan said four other bills on the PIB were being considered.
These include: Upstream Petroleum License and Lease Administration, Downstream Oil and Gas Administration, Petroleum Fiscal and Petroleum Revenue Management.
The PIGB is the first part of over four bills that has been carved out of the Petroleum Industry Bill (PIB).
If eventually passed by the House of Representatives and assented to by the president, Nigeria’s oil and gas industry regulatory authorities will be merged into a single agency to be known as Nigerian Petroleum Regulatory Commission (NPRC) while scrapping all other regulators, including the Nigerian National Petroleum Corporation (NNPC), Department of Petroleum Resources (DPR) and Petroleum Products Pricing Regulatory Agency (PPPRA).
While the ministry of petroleum resources remains the key policy making institution, the new single regulatory authority NPRC will regulate activities in the whole petroleum sector and some new regulatory activities not currently covered.
The NNPC, as proposed in the bill, will be renamed the National Oil Company of Nigeria (NOCN), incorporated as a limited liability company with a two tier board structure and will be separated into five independent subsidiaries and listed on the Nigerian Stock Exchange (NSE) and foreign markets.
The recommended governance structure for the NOCN consists of a supervisory board appointed by the President with a two-term tenure of four years for the Chief Executive; a Management Board headed by the Chief Executive and Group Executive Directors appointed by the Board.
The appointment of Group Managing Director (GMD) of NOCN would be on a tenure basis for an initial term of four years and renewable subject to the achievement of targets.
In the reactions, Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) and the National Union of Petroleum and Natural Gas Senior Staff Workers (NUPENG) described the PIGB passage as good for the oil and gas industry.
The unions, in a Memorandum submitted to the Joint Senate Committee on the PIGB at a public hearing on the Bill, had asked for inclusion of interests of the workers.
They were particularly concerned about staff transfers from the NNPC and other impacted government agencies.
“Clearly, the PIGB is intended to privatize as much as is practicable government interest in the petroleum sector. This if not carefully handled will lead to serious labour issues.”
Continuing, they said, “The position of the PENGASSAN and NUPENG is that staff of the NNPC and all other agencies that will be impacted by the PIGB must NOT lose their jobs or be allowed to be transferred on terms and condition of service that is less favourable than what they currently have under any guise.”
END
